Poor Farmer

In a joint statement with Ethiopia, Starbucks announced earlier this month that they have agreed in principle to sign a licensing agreement. That was a big u-turn on the company’s position regarding Ethiopia’s efforts to trademark its famous coffee marks, Harar , Sidamo , and Yirgacheffe . Many people welcomed the decision though with optimism. At the moment, I was not sure what they meant by "agree in principle;" now, I am more eager to read a copy of the signed agreement. The company, seems to be busy spending more on the future. Understandably, the management wants to leave this story behind at any cost and move on. The discomfiture that other multinational companies, such as Nike, had faced in the past, after giving in to high-profile disputes, is the last ditch one would be willing to do what it takes and get over it. Albeit, typical of corporate giants, Starbucks is not going to spend a penny without a guaranteed stream of inflow of benefits to equate the associate...

By Todd Sullivan 24/7 Wall St May 17, 2007 There have been a slew of articles the past week about the price of Starbucks ( SBUX ) shares and whether or not now is the time to buy them. Let's look closer. Currently Starbucks shares trade at $28 for a PE ratio of 31 times this years 89 cents a share earnings estimate. Many people consider this a bargain saying "Starbucks shares have not traded at this level since Oct. 2005." But is Starbucks situation now the same as then? In a word, no . [ emphasis in the original ] If they hit their EPS growth goal, Starbucks will grow earning this years 18% vs the 30% they grew them in 2005 and as each day goes by, that "if" becomes larger and larger. A closer look at last quarters earning shed some light on upcoming difficulties. Earning were met chiefly due to an unusually large $500 million share buyback and enabled Starbucks to gloss over the fact that margins continue to deteriorate. This buyback become larger whe...

By Andrew Cawthorne Reuters May 17, 2007 ADDIS ABABA, May 17 (Reuters) - Ethiopian coffee exports are on course to rise about 2 percent to some 187,000 tonnes in the 2006/07 season, worth around $450 million, the head of the local exporters' association said on Thursday. "As I see from sales quantities so far, it will be a little bit higher than last year, around two percent," Abdulrezak Sherif, new chairman of the Ethiopian Coffee Exporters' Association, said at his office in Addis Ababa. "The market is better than last year. Prices have improved. There is more demand. Maybe we will this year reach $450 million, I think." Africa's largest coffee producer and the birthplace of the bean, Ethiopia exported 183,000 tonnes worth $427 million in 2005/06. Total annual coffee production, including that used for domestic consumption, was 330,000 tonnes last season, and Abdulrezak said the 2006/07 outturn would be similar. The chairman said he had taken over the ...